Syndicated Bank Loans Packaged Into Asset Backed Securities

The speaker discusses how syndicated bank loans have become the largest sector within the asset backed securities marketplace.  He suggests that packaging a revolving loan is not as common as packaging term loans as it is very difficult for investors to buy revolving debt as principal and interest are always fluctuating. 

Within the credit facility, investors will buy into different tranches and receive different interest rates based on the amount of risk they are willing to take.  In the case of a syndicated bank loan, tranche refers to the different layers of the security; such as the senior, subordinated, and junior subordinated levels of a term loan.